Hurghada Property ROI 2026 — Real Return on Investment Calculations

Gross vs Net Yield — The Critical Distinction

Gross yield (the figure most agents advertise): annual rental income ÷ purchase price. A £45,000 apartment earning £4,500/year in rent = 10% gross yield. Net yield (what you actually receive): annual rental income minus all costs ÷ purchase price. The same apartment after management fees (20%), service charges (£500), maintenance allowance (£400), and insurance (£150) = £4,500 - £900 - £500 - £400 - £150 = £2,550 net income = 5.7% net yield.

Gross yield is a useful comparison metric. Net yield is the number that determines whether the investment makes financial sense.

Realistic Occupancy Assumptions

Hurghada short-let occupancy varies significantly by property quality, location, and management approach. Realistic assumptions for 2026: Sahl Hasheesh, well-managed, quality property: 65–75% annual occupancy. El Gouna, well-managed: 60–70%. Makadi Bay: 55–65%. Al Ahyaa: 50–60%. Central Hurghada: 55–70% depending on proximity to attractions.

Agents often quote peak occupancy figures (80–90%) that are achievable in October–April but not year-round. Use 60–65% as a conservative annual occupancy assumption for financial modelling.

Full ROI Calculation — Real Example

Property: 1-bedroom Sahl Hasheesh, £45,000 purchase price, 20% deposit (£9,000), 5-year payment plan at 0% interest.

Annual gross rental income (65% occupancy, £85/night average): £20,173 × 65% = £13,112. Agent management fee (20%): -£2,622. Platform fees (Airbnb/Booking.com ~15%): included in management. Service charge: -£600. Maintenance allowance (1% of value): -£450. Insurance: -£200. Net income before financing: £9,240. Payment plan monthly: £480/month (remaining 80% over 5 years). Annual financing cost: £5,760. Net income after financing: £3,480.

Return on deposit (£9,000 invested): 38.7%. By the time the property is fully paid (year 5), net income on full value: £9,240/£45,000 = 20.5% net yield on paid-up value.

Capital Appreciation in the ROI

Rental income is only part of the return. Capital appreciation in EGP terms has averaged 12–18%/year since 2022. At 12% annual growth, a £45,000 property purchased today is worth £50,400 after year 1, £56,448 after year 2, £80,623 after year 5 (in EGP-equivalent terms). In GBP, this depends on exchange rates — but even at a flat exchange rate, capital growth adds substantially to total return.

Total return calculation (5-year scenario, conservative): Rental income net over 5 years: £3,480/year × 5 = £17,400. Capital appreciation (conservative 10% EGP/year, flat exchange rate): £45,000 → £72,457. Capital gain: £27,457. Total 5-year return: £17,400 + £27,457 = £44,857 on a £9,000 initial deposit = 498% return on initial capital over 5 years.

What Reduces Returns

Honest risk factors that reduce actual returns below modelled returns: Lower occupancy than projected (most common issue for self-managed properties). Higher maintenance costs in older or lower-quality developments. Management company underperformance. Currency movements reducing GBP value of EGP income. Developer delays on payment plan properties (affects timing of rental income start). Extended void periods in summer low season for less desirable properties.

Mitigation: choose quality properties in prime locations, use reputable management companies, build a 15–20% contingency into financial models, and maintain a 6-month cash reserve.